Objectives of performance appraisal
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I. Contents of getting objectives of performance appraisal
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Management by objectives (MBO) is a tool for performance management and strategic planning.
The MBO technique requires the supervisor and the employee to develop and agree on realistic,
achievable and measurable objectives and then determine how those objectives will be met. In a
true MBO plan, the overall strategic objectives are established for the organization, then they are
broken down into divisional and departmental objectives and finally to individual objectives.
First, set objectives for the manager’s or supervisor’s own upcoming project or time period
(presumably in consultation with a person in the next highest managerial level). Next, the
manager or supervisor should plan the larger departmental objectives.
Second, meet with each employee, outline his or her larger objectives, and guide each person
in determining the smaller objectives and goals that will help achieve the larger departmental and
organizational objectives. The smaller objectives will be the employee’s job or work objectives.
Third, meet periodically (i.e., quarterly or when projects or priorities change) to evaluate the
status for meeting or achieving objectives and to troubleshoot any roadblocks or set new
priorities. Evaluate performance toward achieving the objectives together. A written summary of
the joint evaluation, signed by both the supervisor and the employee, with a copy given to each
party, assures each of them that the other will keep this evaluation in mind in the upcoming
rating period.
Finally, select the next set of objectives. A whole new set of duties may await the employee on
the next project or during the upcoming performance period or fiscal year, so this evaluation will
be strictly confined to closing out the previous project.

The advantage of the MBO process is that it allows employees to actively participate in goal
setting. MBO can increase motivation by relating organizational goals to individual goals.
Expectations and the evaluative measures are defined in advance. The process concentrates on
results achieved rather than on personality traits, so MBO may offer a relatively high level of
objectivity.
The potential drawback of MBO is setting goals in advance that can be difficult to achieve;
sometimes goals are set too high or too low. Goals can be affected by external factors beyond the
employee’s control, such as economic changes, that are difficult to take into account. There
could be difficulty in coordinating the individual’s goals with the overall goals of the
organization and difficulty in making comparisons among employees for promotions or setting
salary levels, for example.
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III. Performance appraisal methods
1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals

in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases
3. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings
4. Critical Incidents Method

The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.
5. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
6. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.

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